But, with the Fed still tightening owing to wild inflation and wage growth:
US housing is beginning to buckle and will make everything economic worse in due course.
It’s not a price bust. At least, not yet. Prices are still rising:
Where the monetary rubber is hitting the road is in construction. Sales are tumbling:
This repeats the pattern of 70s housing busts in which prices were fine but building activity was wildly volatile. There’s a huge pipeline of activity to plunge next:
And, the money chart, a recession will follow to clear the inventory:
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
